Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 22 - Evidence - June 14, 2017
OTTAWA, Wednesday, June 14, 2017
The Standing Senate Committee on Banking, Trade and Commerce met this day at 4:19 p.m. to study the present state of the domestic and international financial system (topic: issues pertaining to international barriers to trade); and, in camera, to study and report on the development of a national corridor in Canada as a means of enhancing and facilitating commerce and internal trade (consideration of a draft report).
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: Welcome, colleagues and invited guests, members of the general public. My name is David Tkachuk, and I'm the Chair of the Banking, Trade and Commerce Committee. It gives me great pleasure to welcome back the Honourable Navdeep Bains, Member of Parliament for Mississauga—Malton who was appointed Minister of Innovation, Science and Economic Development on November 4, 2015.
Mr. Minister and honourable senators, a little housekeeping business. We need a motion. I would like to have a mover to allow a photographer to take photos during our public proceedings this afternoon with the least disruption as possible.
Senator Black; Senator Massicotte. All in favour? Agreed.
Honourable senators, you will recall that in June 2016, after several months of study, our committee released the report Tear Down These Walls: Dismantling Canada's Internal Trade Barriers and in the report our committee recommended that a new Agreement on Internal Trade should contain six characteristics. They are: a negative list approach, a mutual recognition, a formal mechanism to facilitate regulatory harmonization, a binding investor-state dispute resolution mechanism with enforceable prescribed remedies, an improved consideration of trade in services, and the federal government as a permanent co-chair of the Committee on Internal Trade.
On April 7 ministers representing the federal, provincial and territorial governments announced the conclusion of their negotiations for a Canadian free trade agreement, and the CFTA will enter into force on July 1, 2017, replacing the AIT that has been in effect since 1995.
Minister, thank you so much for joining us today to provide an update on the CFTA. We are also pleased to welcome your deputy minister, Mr. John Knubley.
Minister, just before we start, I wanted to let the members know that we received a nice note from the people involved on the Copyright Board who were concerned about the board's activity. If you recall, we had a couple meetings. We issued a report, and they told me they had a very positive meeting with Minister Bains on the Copyright Board reform last week and that he wants to pursue reform separate from the 2017 review, which is what we recommended, and is committed to a path forward. They feel it's the best opportunity for reform since the mid-1990s, so colleagues, thank you very much for supporting the meetings that we had on this issue; and Minister Bains, thank you for responding to their concerns. It will go a long way to improving economic activity in this area.
With that, Minister Bains, I understand you have opening remarks, so please proceed.
Hon. Navdeep Bains, P.C., M.P., Minister of Innovation, Science and Economic Development: Thank you very much, chair. I want to start by thanking my chief negotiator, since this is Public Service Week, who was really instrumental in putting this deal together, Nipun Vats, who is here with us today as well.
I want to thank you all and say that it is a pleasure to be here to address honourable senators of the Standing Senate Committee on Banking, Trade and Commerce. I would like to express my sincere thanks to the members of this committee for the work that you're doing. Obviously you highlighted in your opening remarks the work on copyright and so many other important areas that are critical to our economy.
Your rallying cry for Canada to tear down the walls created by trade barriers within our own country has finally led to a stronger economic union.
Many of the recommendations from this committee's June 2016 report can be found in the Canadian free trade agreement, and they include, of course, a very important feature, which is the negative list approach, and this is really something that we deployed with our international trade agreement with Europe, and it's a very similar process that we followed with the provinces and territories.
So important and central to our free trade agreement is this reconciliation process. It's really going to put in motion harmonizing a lot of the regulations that exist amongst the different jurisdictions, and a stronger dispute resolution process, so a real meaningful process to deal with disputes.
[Translation]
Mr. Chair, the Canadian free trade agreement contains a number of historic firsts. It involves all federal, provincial and territorial governments.
[English]
In another historic first, this agreement will open up trade within our borders in almost every sector of the economy, so the negative list approach really speaks to that broad-based comprehensive approach that speaks to the entire economy. That's why it's considered the most ambitious trade deal to cover our home market.
This agreement will allow Canadians to buy and sell more freely within our borders. That's what it really boils down to. This means in return it will create more business opportunities and job opportunities for Canadians. Importantly, this agreement will maintain strong provisions to ensure that Canadians can work in different parts of the country. I'm talking about carpenters, insurance adjusters, welders, plumbers, even accountants like me. So I think that's very important.
[Translation]
Mr. Chair, the Canadian free trade agreement will also give consumers more choice, especially if they want to buy goods and services from other parts of Canada. That means it will be easier for all of us to enjoy the best of what this country has to offer.
[English]
And that means it will make it easier for all of us to enjoy the best this country has to offer, and it will also make it easier and less costly for companies to sell their goods and services across the country. This is what I explain to my neighbours and constituents, which means that Canadians can expect to pay less for what they buy.
This agreement will also enable more businesses to sell to governments across the country, and as you know, procurement is so important. We are a marquee customer at the federal level, along with our other jurisdictions. So for example, a small company in Moncton or Saskatoon will have more opportunities to secure contracts from all levels of government. In fact, for the first time ever, Canadian companies operating in certain regulated professions, such as engineering and architecture, will be able to compete for government contracts across the country. Again, that's good for business and it's really good for workers. And more importantly, it's good for taxpayers who can expect more value, more competition for their money.
In another historic first, suppliers to most publicly owned energy utilities can bid on a range of government contracts in many parts of the country. So when we talk about procurement, it's really opened up in the energy sector. These contracts are estimated to be worth more than $4.7 billion annually, and that's a brand new business opportunity for companies, both large and small, across the country.
[Translation]
The Canadian free trade agreement will certainly have implications for federal, provincial and territorial governments. It will require all of us to work toward eliminating unnecessary differences in regulations.
[English]
These regional differences in rules and regulations can stifle business growth and really discourage firms from expanding within Canada, and they can lead to higher prices and less choice for consumers. That's why this agreement will also help Canadian businesses scale up so they can compete globally. One of the things our government is committed to is really addressing the scale-up problem, and being a marquee customer and looking at procurement will help validate a lot of our businesses in Canada so when they go abroad and ask, "Do you do business with the Government of Canada?'' they can say "Yes.'' This will really enable them to succeed internationally, because it will ensure that Canada and the businesses in Canada have the same or better access to their home market as our international trading partners.
We have heard of this example that if we were to ratify CETA before CFTA, there is a potential that European companies would have greater access to procurement than Canadian companies. It's really about making sure that we align our domestic trade arrangements consistently with our international trade arrangements as well.
Finally, Mr. Chair, this agreement is forward looking. It sets out a process and a timetable for enhanced trade in a few sectors of the economy that are not currently covered. That includes the sale of alcoholic beverages. So as you have heard, the campaign on free the beer, this is something that's gained a lot of prominence in the House of Commons, and many Canadians are engaged on this issue. For some time now, Canadians have been demanding action on this particular issue.
All governments have pledged to work to enhance trade in beer, wine and spirits with a specific timeline, and that's very important. This is another area where the federal government played a leadership role and said this has to be part of the agreement.
[Translation]
Finally, this agreement will automatically apply to new and emerging sectors, including clean technology and information technology. That's how free trade within Canada drives innovation. This feature is also a historic first.
[English]
I know that I can count on this committee to continue monitoring our government's efforts to further liberalize trade within Canada, and I really welcome your continued engagement on this issue.
As in any negotiation, reaching this deal required compromise. It also required unprecedented levels of cooperation among the federal, provincial and territorial governments, regardless of their political persuasion. This deal engaged NDP, Liberal and Conservative governments. It was great to see this became a non-partisan issue, and I'm proud of the Government of Canada's role in negotiating this agreement.
As a result of our federal leadership, this agreement contains mechanisms that hold all governments to account for living up to its terms.
Mr. Chair, the Canadian free trade agreement strengthens our home field advantage. It emphasizes to companies across Canada that the whole country is genuinely open for business, and the timing couldn't be better.
This agreement will come into effect on July 1, which happens to be on Canada Day, which also happens to be the one hundred and fiftieth anniversary of our amazing country. Thank you very much, merci beaucoup.
The Chair: Thank you very much, Minister Bains.
[Translation]
Senator Massicotte: Thank you for being with us on this pleasant afternoon, Mr. Minister. First I want to congratulate you and your team for having reached your objective. This is an important step forward, and I know that you and your predecessor devoted several years of work to it. Congratulations on behalf of all Canadians!
There have been some positive comments by journalists in the press, while others hoped to see more aggressive and more optimistic measures. It is of course easier for a journalist to express expectations rather than deal with reality. One of the positive comments concerned the fact that there is a dispute settlement process. How do you see the development of this agreement over the next two or three years, in order to have it play a more important role in the Canada-wide economy?
Mr. Bains: Thank you for your question. I agree. You are right.
[English]
There is no doubt that expectations were high, and I think we met those expectations. In particular, I'd also like to acknowledge the work done by Minister Moore, my predecessor, who really put in motion a lot of these conversations as well. As I indicated before, this truly was a non-partisan effort, not only from our perspective but from the previous government as well, and also with the provinces and territories.
You're absolutely correct as well that these started in 2014 officially, the conversations, and we concluded and officially announced something in April 2017, so it was a long process, many rounds, over 20 rounds, and many discussions.
With regard to the regulatory reconciliation process, and that's the point you mentioned, I believe, the timetable is fairly aggressive. We have determined working groups and working tables to start to deal with some of the key issues. We have a very comprehensive schedule that we can share with your committee and would really welcome that opportunity as we go through those working table discussions with the provinces and territories and come to conclusions on aligning regulations.
For example, one of the first ones would be around trucking and transportation in particular. In my riding of Mississauga—Malton, I have Pearson International, the largest international airport in Canada. It's a logistical hub. There are many transportation companies, and we want to deal with the challenges around different weights and loads and requirements for many of the drivers who take their transportation vehicles, trucks primarily, from one jurisdiction to the other. That will be one of the first issues we deal with, and so we have a schedule like that in place.
We also, as I mentioned, when it comes to liberalizing alcohol, have a working group in place for beer, wine and spirits as well. So we would be more than glad to share that with you to demonstrate the timeline we have, and that way there's a little bit of accountability as well, and we welcome the opportunity to update this committee going forward.
Senator Massicotte: In any negotiation, as you well know, everything's relevant to what you have to lose, what you have to gain, and everyone examines their position for their selfish regard, but how do you keep all these provinces' feet to the fire and motivate them to get the real results?
Alcohol, if you're not a producer, you're obviously going to be more protectionist. How do you get them where they care and are prepared to concede somewhat?
Mr. Bains: One of the unique aspects of this particular agreement is the fact that it's a negative list, so it really shines a light on the exemptions. If you recall, when we talked about unveiling this Canadian free trade agreement, there were many conversations around the exemptions as well. That puts a lot of pressure because now it's in the spotlight. Before, with the original Agreement on Internal Trade that was negotiated by Minister Manley post-NAFTA, it was really just sector by sector. You really didn't see the exemptions. That is one very important mechanism and feature about this Canadian free trade agreement.
The other would be the index. We are working with Ernst & Young, and this index is creating a baseline of the irritants that exist, of those challenges that exist, and then having that index shared in a public way so we can demonstrate that we're headed in the right direction, that we're eliminating those irritants. There are a couple of key mechanisms in place that, as you put it, would hold the feet to the fire for many of these provinces and territories.
Senator Black: Thank you very much. I wish to identify with my colleague Senator Massicotte's congratulations to you and your colleagues. It's not perfect, but it's a heck of a start, and I also would like to include my colleagues on this committee for really pushing this agenda, as we're continuing to do today.
Mr. Bains: Yes.
Senator Black: Minister, you have indicated thoughts around process, particularly transportation and alcoholic beverages. Is there a process existing whereby on an annual basis relevant ministers and/or negotiators will meet to keep the pressure on liberalization?
Mr. Bains: Absolutely. We would be meeting fairly frequently. As you know, this is just the beginning, not the end, that we have to embark upon quite a bit of work now to get the process in place to deal with those irritants, to deal with aligning those regulations and to eliminate those barriers that exist.
Senator Black: But there is a process, would you say, and a timeline?
Mr. Bains: Absolutely, correct.
Senator Black: If you were to categorize the Canadian economy as a circle graph, the current work that you have done on the Canada free trade agreement, what percentage of the economy do you believe has now been liberalized?
Mr. Bains: So, that's a good question. No matter what I say, I'll get in trouble from my officials because they are never too comfortable with an accurate number. I remember last time I was here you were sitting just a little closer to myself and you asked me about that question as well.
If I were to make a reasonable estimate based on the size of the economy and the different sectors, taking into account some of the exemptions — so for example, language for us, the issues around national security, there are a couple of areas we have carved out for a whole set of reasons — 70 per cent would be a reasonable number, sir.
Senator Black: Oh, really. Thank you, minister.
The Chair: What would you consider your biggest disappointment in this agreement?
Mr. Bains: That's a good question. You always look back and think can you do things differently, and as I said before, you don't want perfection to become the enemy of the good. We had this alignment with the provinces, and then as you know, we had an election recently in B.C., so you never know with the new government what the new government may impose.
For me, it was really the challenges around alcohol. I must confess, I felt that we could have done more. I thought there was substantive work done with the working group. We could have been more aggressive on that particular file. Frankly, the current situation right now with regard to Comeau, the fact that that particular case has now gone to the Supreme Court, proactively, the government plans to intervene federally, so that might be another mechanism we have to deal with the issue of liberalizing alcohol. That's one area that stood out. We did make some meaningful progress, but we can do better.
Just for the record, I don't drink, but it's an issue that many of my constituents care about.
The Chair: Neither do I, but they do.
Mr. Bains: Oh, there are three here. Okay. I don't know why all this liberalizing alcohol is such a big deal if no one drinks here.
The Chair: It's not that we haven't in the past.
Senator Wallin: We won't revisit those issues.
The Chair: We won't revisit those issues.
Senator Wallin: Just a couple of points of clarification, minister, on the dispute settlement. Can you just explain why a government must initiate a complaint, not an individual or a corporate entity, if that's how I understand it?
If a fine is imposed, where does that money collect and gather and for what is it used?
Mr. Bains: I will defer to my deputy who is looking through his notes, but we strengthened the dispute settlement mechanism, and the fines are now up to $10 million, so we think that's a significant amount. It's a great deterrent and a way for us to enforce our positions and hold particular situations that unfold to account.
With regard to where the money is actually held, that's a good question. I don't have the answer to that. I was going to refer to my deputy, if he's in a position to comment on that.
John Knubley, Deputy Minister, Innovation, Science and Economic Development Canada: This is an issue that's been discussed at some length in terms of allowing individuals to come forward and move forward. We basically created a common fund that would allow for support for initial individuals to come forward and provide for dispute resolution action. The answer is yes; there is movement in this area that allows for individuals to come forward.
Senator Wallin: If the fine is imposed, $10 million, pick a number, does that then go back into the fund? Is that what you're suggesting, to help people? So it stays within the system.
Mr. Knubley: It does.
Senator Wallin: And everyone agreed that government only could initiate?
Mr. Knubley: Individuals can now initiate as well.
Senator Wallin: Because it sort of said something different. Thank you.
Senator Wetston: Thank you, and congratulations, minister, and to your officials as well.
I want to ask you a question, if I may, about the regulatory harmonization. I will not pursue the fact that you have not advanced the potential of a national securities commission, but I can't help mentioning it. I have spent many years of my life trying to do that. In any event, I'll get to the more formal question.
You mentioned working groups, and the challenges are enormous to achieve harmonization. I think that the regulatory mechanisms to achieve it will be challenging, obviously, and you did mention it to some extent.
Can you potentially provide us a bit more information on your expectations with respect to implementation of those particular efforts in regulatory harmonization?
Mr. Bains: Absolutely. There are two specific measures I can speak to in terms of the execution and implementation of the agreement. Some regulatory changes will take place by July 1, and then legislation will be brought forward this fall as well. Those two are specific measures that speak to the negotiated Canadian free trade agreement. Above and beyond that, the working groups are established to continue to work on some of the outstanding regulatory issues, for example, alcohol.
Senator Wetston: I have a more general question, minister, if I may. The Canadian free trade agreement is obviously a very important part of the overall economic strategy of the government.
Mr. Bains: Correct.
Senator Wetston: That's my thought, and I suspect you would agree with that.
How do you see the future of economic growth in Canada as a result of your accomplishments here with the CFTA?
Mr. Bains: This speaks to our government's clear strategy and articulation around the fact that we have to be open. Our government has been clear that, as a market of 35 million people, for us to succeed, grow and maintain a quality of life, we need to be open to trade, and hence why we've strengthened our home-field advantage to the Canadian free trade agreement and why we have pursued ambitious free trade agreements such as CETA and other bilateral initiatives, and also currently with regard to NAFTA.
We recognize that we genuinely have to be open to trade. We also have to be open to investment, and hence why we've changed the threshold amount for investments under the net benefit test for the ICA process, the Investment Canada Act, to up to $8 billion. And we're open to people, which is why we introduced a Global Skills Strategy that says that if you're a company and you want to bring in somebody who is in high demand, with specialized skills, they can now come to Canada within 10 days' processing time.
We think that's a game changer, and that speaks to the overall approach we have. If we're open to markets, to investment and to people, that will enable us to compete. It's really not about productivity, which is important, but also our ability to compete. In order for us to be competitive, we need to have access to global funds, resources, talent and markets. That's where this comes into play, and it speaks to the open approach of our government.
Senator Ringuette: Thank you, and I add my voice to congratulate you on this.
You indicated that this agreement will open up trade within our borders in almost every sector of the economy. What sector of our economy will not be included?
Mr. Bains: As I mentioned, certain exemptions were placed. For example, for us, when we're dealing in the procurement area, procurement was a big achievement. We were able to move the yardstick there.
By the way, if you look at the recommendations made by your committee, except for recommendation 1, item 6, having a permanent co-chair position, and recommendation 5, increasing the funding allocated to the secretariat, everything else we adopted. We felt that it was very much in line with what you heard and what we heard as well.
Those are the exemptions. For example, on procurement, if our national security agencies want to have a carve-out for procurement because of national security issues — CSIS, RCMP, et cetera — they can do that. That is why we would say almost the entire economy. Those are the types of exemptions that exist in a range of areas that we have articulated at our level around languages, for example. We've also indicated a clear exemption in those areas to demonstrate where we think we need to. That's why it doesn't cover the entire economy. We did not want to mislead the Canadian public or businesses or investors that this covers every aspect of the economy.
Senator Enverga: I would like to add my congratulations to the progress.
You mentioned in your speech that the government has pledged to work to announce trade in beer, wine and spirits within a specific timeline. Can you share that with us? What is the timeline at this point?
Mr. Bains: Absolutely. The clock starts July 1, when the agreement comes into force. After one year, the working group would have a plan in place to deal with liberalizing alcohol. The objective is that, over the year, we would work with the provinces and territories to determine a road map of how we can liberalize alcohol. As I said, this was an important issue we wanted to deal with in terms of the CFTA.
Also, as I mentioned, with regard to the Comeau decision that's now gone to the Supreme Court, we will be intervening and articulating our position on how we can further liberalize alcohol.
I think both processes are very clear. The one in the Supreme Court, we don't dictate the timeline. That will be determined by the Supreme Court. But for our particular Canada free trade agreement, we will have a plan in place a year after the agreement starts, which is on July 1.
Senator Enverga: Are all the agreements binding?
Mr. Bains: Absolutely, yes, and hence why we signed onto it. The overall agreement was ratified by all the ministers and they were there. Just like us, as we're going through the process of changing our regulations and bringing in legislation, they will do the same as well. They have committed to this. We have a detailed agreement that we all signed and that we disclosed to the public in April, so that would make it binding.
[Translation]
Senator Maltais: Minister, I have sat in various legislatures in my country for 18 years, and I have always considered it an aberration that Canada signed free trade agreements with other countries, while in our own country it was very difficult to do business. I will get back to that. There was an attempt around 1987 between Quebec and Ontario that fell apart over the issue of labour mobility.
What guarantees did the provinces give you concerning labour mobility? In Quebec labour is very sector-based because of the unions. There are very powerful unions from one region to another, and it is very difficult for a worker to leave Montreal to go to work on the North Shore, and vice versa. How will a worker from Vancouver be able to come and work in Quebec?
[English]
Mr. Bains: Thank you for your question. The issues around labour and labour provisions were dealt with previously in the Agreement on Internal Trade.
As you know, there have been many amendments since the original agreement came into place in 1995, and there have been many updates and provisions.
In this particular instance, when we proceeded with the Canadian free trade agreement, we didn't make any additional changes to labour mobility and labour regulations specifically. I have before me chapter 7, around labour mobility obligations. It's consistent with the existing Agreement on Internal Trade. Basically, the provisions are clear that it allows for individuals, as I mentioned before — from welders to accountants like myself — to have better mobility to work across the country.
The issue around credential recognition is a challenge we're seeing as well. We're working with the provinces on that. That's the outstanding irritant.
Senator Unger: Thank you, minister, for your presentation. My issue does not concern alcohol. I'm from Alberta — from Edmonton. My issue is pipelines. As you know, Alberta has wanted to export more oil and has been stymied. I would appreciate your comments about that.
Mr. Bains: Thank you. In the broader context, our government has been clear when our Prime Minister was leader of the opposition party, he supported the Keystone pipeline, for example, and that particular initiative. Under our current government, we have proceeded with approving three pipelines, which we think clearly demonstrates our ability to get that social contract that we need to proceed with pipelines.
We've been very clear on a broader context that we need to find that balance of achieving our targets when it comes to reducing our greenhouse gas emissions through those targets at the Paris Accord. We've also been very clear that we need to grow the economy as well. We've been able to strike the right balance. In a broader context, that's our approach when it comes to pipelines, and we've articulated that position.
With respect to this particular free trade agreement, there are some specific measures around energy efficiency that will also be good for the manufacturing and energy community — standards around compliance, certification — all of that will be harmonized as well.
In a broader context, we have been clear on our position with the ability of Alberta and other jurisdictions to export and get their product to market and international markets more easily.
With regard to this specific free trade agreement, there are issues around energy efficiency as well that were dealt with in a meaningful way around certification, compliance and all those standards that existed that will be harmonized now.
Senator Unger: I mean actually seeing those pipelines get built, because there are many irritants or obstacles.
Mr. Bains: As you know, we've set in motion now very clearly our desire to proceed with the projects. We're obviously working very actively on that. Minister Carr, who is responsible for natural resources, is constantly engaged with the business community, the provinces and stakeholders in how we can move this process forward.
We recognize that those pipelines are really critical to our economy as well. The three we have approved, for example, will generate close to 27,000 jobs, so we recognize that proceeding in a timely manner is important. We also want to make sure the conditions are met that were set out with regard to the approval process.
The Chair: Are there matters, minister, that are not quite solved but you see there being a good chance of resolving in the near future?
Mr. Bains: There are always matters. That's what the working groups are designed to establish. We have got issues around food safety rules; trucking regulations, as I mentioned; and issues around energy efficiencies. These are the kind of issues that we want to deal with in a timely manner.
I've said we actually have a clear process and framework in place. It's a negative-list approach, so everything is encompassed and you have to explain the exemptions. That puts the onus on why these exemptions exist. You actually had in your report a one-pager I want to highlight, which is the 10 weirdest barriers to trade. That pretty much highlights them. You're telling me that there's a traffic jam that some truck configurations must be driven at night in British Columbia, for example, or that a sticky situation — this one for sure really irritates me — provincial, territorial and federal standards for maple syrup grades differ.
The point is these kinds of irritants you've highlighted that I also acknowledge and support will be part of the working groups to deal with in a timely manner.
The Chair: I asked you that question because it might be an opportunity in the fall for us to do some hearings that might bring more of those matters to the fore.
Mr. Bains: I would welcome that opportunity, because it allows me the ability when I meet with my counterparts to say, "This is what the Senate committee did, above and beyond the work you've done, to help implement and execute.'' You've heard from consumer groups and business groups. That would be very helpful.
Senator Black: I want to shift gears ever so slightly, given that the minister is here, but with your consent.
The Chair: If the minister agrees, that's fine.
Mr. Bains: I have no objections. As I said, I have my deputy here to answer all the difficult questions.
Senator Black: I don't think these are difficult anyway.
I want to talk about the super cluster. I have three questions in respect to the initiative. First, congratulations. A billion dollars to spur innovation is a very good thing in Canada. I'm wondering, minister, if you and your colleagues in taking the decisions that you will, have you any industries that you have prioritized that you are looking to benefit?
Mr. Bains: Yes. We haven't highlighted any specific industry, but we have looked at some sectors or areas of high growth that we identified in our budget. For example, we talked about our commitment to clean energy. That was one area in the budget. Clean resources, advanced manufacturing, agri-food — Dominic Barton talked a great deal with the Growth Council. There are a few more examples that exist. We've identified about six in our budget.
Senator Black: Thank you. I have seen those, and I wondered whether, as the process has moved forward, if there was any refinement of that thought at all.
Mr. Bains: Again, we don't want to be prescriptive. Health biosciences are very important in my riding; there are so many medical devices, pharmaceutical companies, et cetera. That's one of the themes as well. But the example I often cite is CAE. It does a lot of simulation and training in aviation. It's used in technology now, not only for simulating aviation but also for the health care sector.
There are a lot of these cross-platforms that exist, so we have to be careful not to prescribe. We put forward a very open, competitive process around superclusters and identified the criteria. The response has been overwhelmingly positive, but we only want to fund up to three to five, so that billion dollars you talked about the $950 million —
Senator Black: That was my next question. That's your decision, is it?
Mr. Bains: Yes. Our clear strategy is that we want to avoid the peanut butter approach. We want to focus these limited resources on the best possible bids in a very open and competitive process. We don't know what it's going to look like. It's really incredible to see when you bring people from different sectors and different levels of government with academic institutions, a lot of the magic happens there. Some of these proposals might over-exceed our expectations; I'm actually confident they will.
We want to be very thoughtful about how we deploy our funds; hence why we have selected three to five possible decision points as opposed to many more than that.
Senator Black: I'm very happy to hear that.
Finally, do you have any regional guidelines in place? That is to say, of the three to five, do you want one for Atlantic Canada, one for the Pacific, one for the Prairies and two for downtown Toronto?
Mr. Bains: No, nothing like that. We recognize the regional strengths and weaknesses that exist. I'm confident that in this process, every region will be able to compete. It is a level playing field. We have strengths across the country. You shouldn't underestimate agriculture, forestry, mining, for example. People view them as traditional sectors, but I would say artificial intelligence, which is a very critical horizontal platform, can be a great enabler for the financial sector, agriculture, mining, et cetera. If they partner up, a lot of interesting things can happen. That means we're open to proposals from across the country.
Senator Black: Great. Thank you very much.
Senator Wetston: One of the economic conditions that always troubled me is excessive fragmentation in Canada. It's our strength; sometimes we think it's a strength and sometimes we consider it to be a weakness. I think we've seen it across some sectors.
It's more challenging today in achieving convergence in a multi-speed, global economy where various economic conditions exist and need to be managed in that context.
One of the things that invariably comes up when it comes to trade is competition on one side and trade on the other side. I think of trade barriers as something that inhibit the opportunity for competition and market forces.
Do you see opportunities here by opening up trade barriers to allow market forces to potentially, across the country, discipline price and increase or enhance economic efficiency?
Mr. Bains: That's the objective; that's the exact goal. We want to see the intensification of competition. In order to do that, we need to level the playing field and eliminate any barriers that may exist or any kind of mechanism that favours one sector, one region or one company versus the others. That's really the objective — to intensify that competition.
And you're absolutely right: Fragmentation just protects the status quo. For our companies to be able to succeed going forward, they not only need to succeed in Canada but they have to think in the global context. We're actually doing them harm in the long run if we continue to create conditions that protect them in this way. So we feel that by levelling the playing field, by eliminating these barriers and creating those conditions of competition, we're actually setting them up for success in the long-run.
I totally agree with you that fragmentation does have its advantages. We're not perfect. We, in Canada, have supply management, for example, and other measures in place that exist as well.
I think that our approach in this particular free trade agreement was clearly to create a level playing field and to see more competition, which would mean more choice for consumers and better price points as well.
On fragmentation, one of the initiatives we're working on, which is unrelated but I think it speaks to our government's commitment, is around data. There's a lot of data fragmentation as well. In a new digital economy, we can see enormous opportunities there as well, and we look forward to the opportunity to speak to you about our plans on that going forward as well.
Senator Wetston: Thank you.
[Translation]
Senator Maltais: Minister, Canada is about to enter the European market. It is making growing inroads in Asian markets. Canadian agriculture is well regarded throughout the world for the quality of its traceability and the safety of its products. I sit on the Standing Senate Committee on Agriculture and Forestry, and all of the people we questioned have told us that agriculture must evolve toward better technology than we currently have, whether we are talking about machinery, analysis or soil management. Agriculture is also facing environmental constraints. Are you going to make agriculture a priority sector over the next few years?
[English]
Mr. Bains: Thank you for your question. I am in violent agreement with you with the potential of agriculture. It's one of those key areas that was identified in our budget: agri-food. As I mentioned, my deputy here was a former Deputy Minister of Agriculture, so he is a big supporter of the agriculture potential in Canada.
We believe that this is a very strategic opportunity for us. As you said, our brand is strong, our food quality is great. There's growing demand and appetite in a lot of these key markets, particularly in the emerging markets, in China or India, where there's an enormously vibrant middle class that's there. And guess what? They want the same things you and I eat, and we produce them here in Canada. There's also an opportunity for us to focus on value added as well. My colleague the Minister of Agriculture is focusing on value added.
In order to see success in that sector — and you're absolutely right — it really is about technology adoption, how we can leverage the strengths we have there and really infuse innovation and investments in agriculture for us to be able to take advantage of the global market opportunities and make our companies more export oriented. Hence why we have introduced a new strategic investment fund that was announced in the budget.
This particular fund was very sector focused. It was aerospace and auto, primarily, and it had some other components to it. We have made it sector agnostic now, and we really opened it up to many sectors. We think that will benefit a lot of proposals coming from the agricultural sector.
The way this fund works is basically looking at how can we unlock a lot of the money off the balance sheets for more research and development, how can we focus on investments and technology. We really think that this initiative will benefit the agriculture sector as well. We have other measures in place, but from our perspective as a recent proposal in the budget, we think this will really help the agriculture sector.
Mr. Knubley: I want to add two sentences, though, as the former Deputy Minister of Agriculture.
The Chair: Go right ahead.
Mr. Knubley: We worked very closely with Dominc Barton around the Growth Council to identify agriculture and agri-food in just the way you talked about this: opportunity, particularly with the middle class in Asia, but I would say in South America as well.
You see a tremendous strength, if you like, in Canada in the R&D side of agriculture. We can, of course, do way more. We can talk about the example of canola, which has led to a billion dollar industry and the discoveries there. NRC and Agriculture Canada were involved in that discovery. But precision farming and the wheat strains we have developed over the years are great examples of research and development that have been done in agriculture.
That image of agriculture as that old business with the Massey Ferguson tractor in 1949 sitting in the field is not the right one. We need to change that.
Mr. Bains: If I may, chair, we have working tables that we will establish for each of those sectors for advanced manufacturing, for cleaning resources, for clean tech and agri-food.
Senator, if you're interested in that, we would be more than welcome to engage you in that process as well. The objective of these working tables is to bring all the key actors from that particular sector to come together and see how can they strengthen the supply chains, how can they reach our ambitious growth targets, our export targets. We will use our convening power to bring in all the key people from the agri-food sector together, for example. The same thing with clean tech and clean resources, advanced manufacturing, the digital economy, et cetera.
If you're interested, we would be more than willing to engage you on the agri-food side because, as I said, my deputy will be the point person helping us with those tables and really coordinating those efforts on a going-forward basis.
[Translation]
Senator Maltais: Thank you very much.
[English]
The Chair: Thank you very much, Minister Bains and Mr. Knubley for updating us on the trade issues. It's very much appreciated.
Also, I would like to mention that with your testimony today, you seem to have recognized the importance of intellectual property, digital technology and artistic development. All I can say is — and I think I speak on behalf of our committee — good luck with the Copyright Board.
Mr. Bains: We are ambitious.
The Chair: We wish you every success. Every time you get a little despondent, just say, "This is really important to Canada,'' and we're all behind you.
Mr. Bains: Well, thank you very much. We have an IP strategy that we will be working on. We're looking, obviously, at the copyright review, also responsible for reviewing the Telecommunications Act and the Broadcasting Act, so a lot of exciting things are coming up. Any way we can work with you, we really welcome that opportunity, chair.
The Chair: Much appreciated. We'll be in touch. With that, I will conclude this portion of the meeting.
(The committee continued in camera.)